What are customer and market research?

Customer and market research are fundamental in helping customer success teams gain an invaluable understanding of the customers they serve, their needs and challenges, while also gaining essential feedback to improve the product or service experience.

This phase is critical in gauging an understanding of:

What you need to provide to drive successful customer outcomes
How well the product/service is meeting customer needs
Where improvements can be made to enhance the overall customer experience

But where do you get such insights? How do you get customers to openly share feedback? What do you ask them? How do you consolidate all that information? What actions do you need to put in place based on the findings?

Lots of questions. This guide provides the answers.

In this guide, we'll be unpacking:

Customer and market research essentials
Why communication with customers is important
When customer and market research is needed
Alternative ways to gather customer insights
Getting started with research

Customer and market research unpacked

Trying to deliver a successful customer experience without understanding your customers and their needs is like sailing a ship without a rudder - you'll just drift aimlessly.

Customer and market research is fundamental in helping customer success teams gain an invaluable understanding of the customers they serve and their challenges, while also gaining essential feedback to improve experiences.

What is customer and market research?

Customer and market research involves gathering insights into customer perspectives, needs, behaviors, and preferences in order to better serve them and improve their experiences. This often involves surveys, interviews, focus groups and other methods to truly understand:

Customer demographics and attributes
Customer goals, pain points and challenges
How well the product/service is meeting their needs
Areas for improvement in the customer experience

Customer and market research enables customer success teams to better understand and empathize with customers. The insights gleaned are critical for:

Understanding what customers need to be successful
Identifying gaps in how well needs are being met
Determining where to focus to enhance the customer journey

There can be confusion between market research (looking at the overall market dynamics and opportunities) and customer research (understanding the detailed needs of your current customers). Both are important, but this guide focuses on customer research.

Customer research allows companies to optimize experiences for their existing customer base by directly addressing customer needs, challenges and sources of dissatisfaction. It provides a voice of the customer viewpoint that guides priorities.

Things worth having don't land in your lap; you have to put in the work. Customer success teams need to proactively understand their customers through research - it's an essential part of delivering outstanding customer experiences.

What's the difference between market research and customer research?

Market research is the systematic process of gathering data on target markets or industries. Its goal is to identify market trends, sizes, growth potential, competition levels, and customer demographics/firmographics.

Customer research focuses squarely on understanding the experiences, needs and challenges of a company's existing customer base. It involves qualitative and quantitative methods to capture the authentic voice of the customer.

While market research looks outward at opportunities, customer research looks inward at how to better serve those you already have.

The power of customer research

Customer research provides the detailed, bottom-up view needed to optimize every aspect of the customer experience and journey. Some of its key benefits:

Building customer personas: Rich personas represent the different customer types, their needs, behaviors, pain points and goals. This guides service, support and success plan design.
Tailoring messaging and content: Understanding the real language customers use to describe their challenges allows you to refine how you communicate.
Driving retention and loyalty: Truly delighting customers requires resolving their friction points and unmet needs exposed through direct feedback.
Improving products and services: Their actual experience using your products as well as suggestions for improvements provide a roadmap for ongoing enhancements.
Identifying new opportunities: Customer insights often reveal unmet needs that can seed new offerings, tool kits or resources for driving greater value.
Guiding decisions: Customer perspectives provide indispensable guidance on where to double down and where to cut your losses across all facets of customer operations.

Customer success teams need to communicate directly with their customers on a regular basis. It's essential.

In fact, strong communication consistently ranks as one of the most critical skills for customer success professionals. Customers want to feel heard and understood.

Which brings us to the question: When was the last time you really listened to your customers? Listened without judgment to understand their authentic experiences?

After all, they are the ones who use your product or service daily. They experience pain points and friction. Customers will be candid about what is or isn't working if you create an environment of trust and openness.

When was the last time you proactively asked customers:

What challenges are they facing?
What has their experience been like so far?
What would make them wildly successful?

Customers want to be heard and have their voices reflected in their experiences with your company. The more you communicate with them through research, the more you can refine and optimize their journeys.

When is customer and market research needed?

Put simply, ongoing communication needs to be at the heart of a customer success team's practice. A team operating in a vacuum, relying solely on assumptions about what customers need, will inevitably stumble.

The more you engage customers directly through research, the more you'll truly understand their perspectives and needs. If you don't proactively solicit customer feedback, you'll be guessing instead of accurately perceiving reality.

There's no prescribed frequency for customer research, as every company's situation is different. At a minimum, you should pulse customers at least quarterly through surveys, focus groups, or interviews. More mature customer success functions continuously capture feedback loops.

The key is developing a cadenced approach to gathering customer insights on an ongoing basis and hardwiring them into your program's processes and operations.

Why is customer research important?

Do companies release new products without any user testing? Do marketing campaigns get rolled out without being vetted by customers first? Or do customer support teams improvise based on their own assumptions rather than customer realities?

The answer ideally should be a resounding "no" in all cases. The most successful companies ground their decisions in direct customer feedback first - then design and optimize experiences accordingly.

In a nutshell, customer research reveals what customers truly need and value so you can meet or exceed those expectations consistently. It's critical to make informed decisions across all facets of customer success. But how exactly does it help? Here are some key benefits:

Understand the customers you serve It's impossible to drive successful outcomes unless you deeply understand a customer's realities. Customer research provides answers to key questions like:

Who are our different customer types or personas?
What are their goals and measures of success?
What challenges or barriers are they facing?
What capabilities or resources could help them achieve more?

With these insights, you can map out highly tailored services, resources, and journeys for each persona.

Improve the end-to-end experience

Before making any modifications, it's vital to solicit input from customers on their experiences. Their candid feedback highlights areas of friction and dissatisfaction such as:

Specific issues customers face when using your products
Gaps between their expectations and reality
Aspects they find confusing, frustrating or falling short

With this voice of the customer, you can prioritize and address the most impactful areas for improvement.

Enhance product and service delivery

Usability testing and co-creation sessions with customers reveal strengths and weaknesses in how you serve them. Seeing real people use your products surfaces insights and ideas for change that your team may have missed.

Some of the most impactful improvements and innovations come directly from observing customers' actual behaviors and needs.

Boost customer retention

Retaining customers is hugely dependent on delivering an excellent ongoing experience tailored to their needs. By regularly checking in, you uncover churn risks and opportunities to provide greater value through:

Uncovering unmet or under-appreciated needs
Making interactions simpler and less frustrating
Tailoring messaging and value communication

The highest levels of loyalty and retention are achieved when companies truly understand customers at a deep level and translate those insights into tangible experience improvements.

To maximize the value of customer research, you need a systematic process for sharing findings and insights across the organization. Some best practices include:

Create a central dashboard for housing customer feedback data
Use interactive tools to visualize key insights
Schedule regular sessions to discuss findings and brainstorm actions
Build owners for each major action item coming out of research cycles
Track and measure how actions actually impact customer sentiments over time
Celebrate successes by showing how customer feedback directly improved KPIs

Involving stakeholders across teams like product, marketing, support and more ensures customer insights get institutionalized into how all functions operate. This united approach keeps the company relentlessly focused on the customer.

How to identify the right customers for research

How to choose your sample

It's essential to source input from customers that accurately represent your customer base. To build a representative sample, follow these guidelines:

Aim for 8-10 participants per core customer persona/segment: Identify your key customer types or personas, and source a separate sample group for each with roughly 8-10 participants. This ensures you capture the nuanced perspectives across different customer scenarios.

Tap your existing customer base: Look through your CRM and survey records to find recent customers that can still vividly recall their experiences. Having context into their actual journey and touchpoints will provide richer insights.
Mix tenures and health scores: While input from enthusiastic, long-tenured customers is valuable, also include some newer customers and those experiencing challenges. A diverse mix of perspectives prevents sampling bias.
Represent different attributes: Ensure your sample spans the various attributes that could impact experiences - company sizes, industries, use cases, etc. More variation leads to nuanced findings.
How to engage customers for research: Since customer success teams have existing relationships with customers, it's usually easier to recruit them for research compared to market research surveys. Some proven approaches include:
Leverage your customer marketing channels: Use channels like customer newsletters, social media, online communities or in-app messages to share opportunities to participate in an upcoming research session. Offer incentives like gift cards to drive higher response rates.
Directly invite key customers: For critical outputs like journey mapping or co-creation sessions, directly invite your strategic customers to attend. Having a personal conversation increases their likelihood of participating.
Work with Customer Advisory Boards: Any customer advisory board meetings you have are a prime opportunity to capture the voices of some of your most knowledgeable and forward-thinking customers.
Partner with customer-facing teams: Customer Success Managers, account managers, support staff and others who frequently interface with customers can be great sources for identifying interested research participants.

The most effective approach is often a multichannel mix - sending broad invitations while also personally recruiting some strategic customers when needed. The key is making them feel their voices are extremely valued.

Alternative ways to gather customer insights

While dedicated customer research is invaluable, there are other avenues customer success teams can leverage to stay connected to the voice of the customer:

Customer support interactions: All those 1-on-1 conversations, inquiries, and complaints coming into your support team contain raw, unfiltered feedback. Analyze them for themes.
Customer community discussions: If you have an online customer community, pay close attention to the questions, comments and idea submissions - these highlight voice of the customer perspectives.
Product usage analytics: While not strictly voice of the customer, analyzing product usage metrics like adoption, stickiness and behavior flows can reveal experience gaps to probe further.
Social media listening: Maintain searches on Twitter, Reddit and other channels where customers may discuss your brand, products and competitors. The conversations reveal unvarnished opinions.

These alternative sources help amplify and validate the findings from your dedicated customer research pursuits. Using multiple lenses creates a more comprehensive view into the customer mindset.

How to conduct effective customer research

Once you understand the value of customer research, the next step is executing illuminating studies effectively. Follow this 5-step approach:

1. Define your goals

First, clarify the strategic objectives and specific decisions you need customer input to guide. Is it understanding retention drivers? Identifying product enhancements? Mapping out improved customer journeys? Defining goals upfront focuses your research approach.

2. Determine your target participants

You'll want a mix of customers across different tenures, segments/personas, health scores and other attributes. Creating a screening criteria and recruiting plan upfront ensures you capture diverse, trustworthy voices.

3. Choose your research methods

Select techniques that best provide the depth of insights you need based on your goals. Methods may include in-depth interviews, focus groups, usability testing, ethnographic studies, support ticket analysis and soliciting journey feedback.

4. Create a discussion guide

Don't just wing it - prepare an interview guide with open-ended questions that systematically probe the areas you need to understand. Define the flow and seed questions, but leave flexibility to have authentic conversations.

Look for key themes, insights, representative quotes/stories and substantiated opportunities across all your research activities. Create deliverables that bring the voice of the customer to life in impactful ways. Then share and socialize findings broadly across teams.

Additional success factors:

Make the research experience positive to build goodwill
Use incentives to maximize participation and appreciation
Validate findings from multiple sources and perspectives
Prioritize high-impact areas to incorporate customer feedback
Communicate back to customers on how you're evolving based on their input

The more you incorporate the voice of the customer into your processes, the more you'll be able to proactively design best-in-class customer experiences. It's a continuous journey of listening, operationalizing insights and measuring impact.

Examples of customer research questions

To help spark ideas, here are some example questions you could incorporate into different types of customer research activities:

For customer interviews/journey mapping:

What were your initial goals/desired outcomes when purchasing our solution?
What has your experience been like so far in trying to achieve those outcomes?
What roadblocks or challenges have you faced along the way, if any?
What interactions or touchpoints stood out - positive or negative?
How can we improve your end-to-end experience going forward?

For usability testing/product feedback:

Walk me through your typical workflow when using [feature]?
What frustrations or difficulties did you encounter, if any?
Which aspects were most/least intuitive or easy to use?
What capabilities are missing that would be valuable to you?
How can we enhance or redesign this experience to be more helpful?

For customer health scoring/retention insights

How likely are you to renew your subscription? What factors impact your decision?
What value are you realizing versus your initial expectations?
What could we do better to drive more value realization?
What factors would cause you to consider switching solutions?
What resources or additional help do you need from us?

Of course, these are just examples to prime the pump. The most relevant and actionable questions will depend on your specific research objectives and are best co-created with the customers themselves.

Customer research: A recap

No company can deliver truly exceptional customer experiences without directly consulting the customers themselves on an ongoing basis. Customer research provides the voice of the customer perspective that guides how you strategically design, refine and optimize every touchpoint.

While exploring market trends has value, the deepest insights come from proactively listening to your customers' authentic needs through interviews, feedback, journey mapping and observational studies. This allows you to see your business through the customer lens.

The most successful customer success and experience teams weave customer research into their DNA as a continuous, institutionalized practice across all functions. They not only capture the VoC, but also operationalize and measure the impact of incorporating that feedback into better experiences.

When you truly understand your customers' realities at a profound level, you can engineer experiences that delight them and foster long-term loyalty. That's the power of customer research.